Ford CEO Forecasts Huge Increase in In-Car Software Services

Over the next few years, Ford Motor Co. anticipates a remarkable 1,000% surge in revenue from in-car software services, including its hands-free driving feature.

To harness growth, the automaker announced Monday that it has hired former Apple Inc. executive vice president Peter Stern to lead a newly created technology-focused unit. Stern’s job is to grow Ford’s BlueCruise hands-free driving system and develop other in-car services to sell to millions of owners.

CEO Jim Farley aims to create a continuous revenue stream from software services that smooths out the ups and downs of the automotive industry. Ford already has half a million software subscribers, mostly in its commercial fleet business, Farley said on a call with reporters.

“We’re now in the hundreds of millions of dollars in revenue with very healthy margins,” he said. “We expect to grow tenfold in the coming years just based on the growth we’ve seen.”

Sales of services, such as software to control the vehicle’s speed, generate more than 50 percent of the gross margin, Farley said. That’s up from the 8.3 percent margin before interest and taxes that Ford had in the first half of this year.

Ford will introduce a new electric architecture for its gasoline and electric models in 2025 and 2026, including its best-selling F-150 pickup truck, which will allow the automaker to offer more on-demand services, especially in the areas of safety and security. Farley said.

“This is going to be Ford’s fastest growing revenue,” Farley said. “And unlike in our vehicle business, you’re talking about huge margins.”

Stern is the latest former Apple executive to move into the auto industry. At Ford, he joins Doug Field, who Farley hired in 2021 as the automaker’s director of advanced technology and embedded systems. In May, General Motors Co. hired Mike Abbott, former vice president of Apple’s cloud services division, to start a new software unit.